British businesses and workers are breathing a collective sigh of relief as the United Kingdom and South Korea finalize an upgraded free trade agreement that promises to reshape the flow of goods and services between the two nations. With the ink barely dry as of December 16, 2025, the deal arrives just in time to spare around £2 billion worth of British exports from facing steep new tariffs—an outcome that could have priced iconic brands and everyday goods out of the world’s 12th largest economy.
According to IBTimes, the agreement guarantees permanent tariff-free access across a staggering 98% of South Korean tariff lines, offering British manufacturers and exporters a rare sense of long-term certainty. For more than 1.5 million people employed by UK firms exporting to South Korea, this is more than just a diplomatic handshake—it’s job security in uncertain times. From luxury carmakers like Bentley in Crewe to factory workers canning Guinness in Runcorn and fishers supplying Scottish salmon, the livelihoods of many depend on open access to the South Korean market.
Frank-Steffen Walliser, chairman and chief executive of Bentley Motors, didn’t mince words: “South Korea is a key market for Bentley and the luxury vehicle market. To secure immediate ongoing access to South Korea and a positive long-term trade deal is great news.” His optimism is echoed across industries, as the deal not only averts an imminent tariff shock but also opens up new avenues for growth.
But what exactly does this upgraded deal mean for British and Korean businesses, and what’s in it for consumers on both sides of the globe?
The foundation of the new agreement is its promise of permanent tariff-free access for 98% of goods, matching the terms the EU previously enjoyed with South Korea. This was no small feat, especially as the UK’s prior arrangement was a carryover from its EU membership, patched together after Brexit in 2021. The Department for Business & Trade described the move as “future-proofing” the UK’s trading relationship with a crucial Asia-Pacific partner. With South Korea’s import market projected to grow by 26% by 2035, driven by a surging middle class, the timing couldn’t be better for British exporters hoping to tap into one of Asia’s most dynamic economies.
For UK-based drinks giant Diageo, the deal is nothing short of essential. Nik Jhangiani, Diageo’s interim chief executive, praised the negotiators, saying, “I commend Sir Chris Bryant and his South Korean counterpart Jung-Kwan Kim in securing a new trade agreement between the UK and South Korea. The deal will support export growth for Guinness, canned in Runcorn, and help satisfy the growing demand from South Korean consumers for the world’s number one stout.”
Beyond beer, the agreement offers fresh protections for geographical indications (GIs) from all four UK nations. These GIs—covering products like Scotch whisky and English wine—ensure that traditional British specialties are recognized and protected in South Korea. This protection isn’t just symbolic. According to The Drinks Business, the Scotch whisky industry received a major boost in 2011 when the EU struck a deal with South Korea, phasing out a 20% import duty and safeguarding the Scotch name. The new FTA is set to build on that progress, potentially driving a further surge in exports from 2025 onward.
The wine sector is also raising a glass. English wine exports jumped 35% in 2024, now making up 9% of total sales—a significant leap from just 4% five years ago. Nicola Bates, CEO of WineGB, noted, “The UK wine sector is rapidly growing from 4% to 9% in 5 years with export volumes up 35% in 2024, so all measures to open up markets are welcome, including this enhanced Free Trade Agreement between the UK and the Republic of Korea. The inclusion of dedicated provisions to promote smooth customs procedures will help remove barriers and create a more efficient pathway for our wines to reach Korean consumers.”
It’s not just about goods, though. Over 70% of UK–South Korea services trade already happens digitally, and the new deal is poised to add approximately £400 million annually to UK services exports in the long run. The agreement legitimizes e-contracts and eases rules on data flows, making it easier for British financial and insurance firms to operate in Korea. Chris Hayward, policy chairman of the City of London Corporation, said the deal “will give UK firms more confidence to expand in one of Asia’s most dynamic financial hubs, especially as other major economies lean towards protectionism.”
Public procurement is another area set for transformation. UK advertising and media firms can now bid for South Korean government contracts in advertising services, a market valued at £86.2 million per year. Previously, this sector was off-limits to British agencies. The deal also opens up public tenders in Sejong City, a burgeoning administrative hub that spends around £46.2 million annually on goods and services ranging from education to digital projects. For smaller UK firms, these new procurement channels and simplified customs procedures could turn South Korea’s public sector from a distant dream into a real opportunity.
Meanwhile, the trade relationship is not a one-way street. Korean products, particularly soju—the country’s national spirit—are poised to make further inroads into the UK. Jinro, the world’s top-selling spirits brand, has focused on the UK since 2022 and has reported a remarkable compound annual growth rate of 73% in the UK over the three years to July 2024. Parent company HiteJinro has secured supermarket listings with Sainsbury’s, Costco, Morrisons, and Tesco, with plans to keep investing in the UK market. As trade barriers fall, British consumers can expect to see more Korean soju on store shelves and cocktail menus.
The agreement also features modernized rules of origin, making it easier for British-made cars and medicines to qualify for tariff breaks even when they contain imported parts. Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, pointed out that the upgrade comes at a time of rising protectionism globally and “shows the UK still wants to trade,” giving car makers more confidence in selling to South Korea.
All told, the deal is a textbook example of proactive diplomacy—preventing a crisis before it erupts while unlocking new growth for both countries. It saves £2 billion in goods from looming tariffs, offers services firms a shot at an extra £400 million annually, and opens government contracts worth tens of millions. For a UK eager to assert its place on the global stage post-Brexit, and a South Korea looking outward, it’s a timely reminder that open markets can still deliver tangible benefits in a world where protectionism is on the rise.
As the formal signing draws near, businesses, workers, and consumers on both sides have plenty of reasons to watch this space. Whether it’s a glass of English sparkling wine in Seoul or a shot of Korean soju in London, the future of UK–South Korea trade is looking decidedly brighter—and a little more spirited.
